Correlation Between Putnman Retirement and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Putnman Retirement and Aberdeen Emerging at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Putnman Retirement and Aberdeen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnman Retirement Ready and Aberdeen Emerging Markets, you can compare the effects of market volatilities on Putnman Retirement and Aberdeen Emerging and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Putnman Retirement with a short position of Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnman Retirement and Aberdeen Emerging.
Diversification Opportunities for Putnman Retirement and Aberdeen Emerging
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Putnman and Aberdeen is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Putnman Retirement Ready and Aberdeen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Emerging Markets and Putnman Retirement is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Putnman Retirement Ready are associated (or correlated) with Aberdeen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Emerging Markets has no effect on the direction of Putnman Retirement i.e., Putnman Retirement and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Putnman Retirement and Aberdeen Emerging
Assuming the 90 days horizon Putnman Retirement Ready is expected to generate 0.51 times more return on investment than Aberdeen Emerging. However, Putnman Retirement Ready is 1.95 times less risky than Aberdeen Emerging. It trades about 0.21 of its potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about 0.07 per unit of risk. If you would invest 2,592 in Putnman Retirement Ready on September 13, 2024 and sell it today you would earn a total of 36.00 from holding Putnman Retirement Ready or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Putnman Retirement Ready vs. Aberdeen Emerging Markets
Performance |
| Timeline |
| Putnman Retirement Ready |
| Aberdeen Emerging Markets |
Putnman Retirement and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnman Retirement and Aberdeen Emerging
The main advantage of trading using opposite Putnman Retirement and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnman Retirement position performs unexpectedly, Aberdeen Emerging can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Aberdeen Emerging will offset losses from the drop in Aberdeen Emerging's long position.| Putnman Retirement vs. Putnam Equity Income | Putnman Retirement vs. Putnam Tax Exempt | Putnman Retirement vs. Putnam Floating Rate | Putnman Retirement vs. Putnam High Yield |
| Aberdeen Emerging vs. Ridgeworth Seix Government | Aberdeen Emerging vs. Schwab Government Money | Aberdeen Emerging vs. Inverse Government Long | Aberdeen Emerging vs. Payden Government Fund |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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